Failing Health Care Co-ops Will Cost Taxpayers

Consumer Operated and Oriented Plan Programs (COOPs) were really a political compromise between Members of Congress who wanted a public plan option and those who didn’t. Once the Affordable Care Act passed, COOPs had outlived their usefulness. However, they are now failing and will cost taxpayers plenty. Senior Fellow Devon Herrick testified before a congressional committee.

Searching for a New Vision: New Environmentalism

The 104th Congress trumpeted an environmental reform agenda in 1995. Touting risk assessment and cost-benefit analysis, reformers set out to change the rules of the environmental policy game. They failed. They failed in part because they focused on what decisions should be made, stressing the costs and inefficiencies of past policies rather than the gains that could be made by carefully restructuring the environmental decision-making process.

Using the language of calculation - dollars and cents, efficiency and compensation - the reformers did not appeal to the American public. The language may even have frightened some into viewing reform as abandonment of basic environmental protections.

Too much of the reformers' message was negative. The focus of reform was on revoking, limiting, constraining. Reformers correctly pointed to the excesses that had crept into environmental policy during 30 years of domination by rule-bound bureaucracies. But they did not provide an alternative way of protecting the environment. They did not even clarify the basic questions: What is environmental protection and does environmental protection matter?

Discussions of risks and costs do not adequately answer such questions. The architects of reform need to explain why we care about environmental protection.

Caring for the Earth. Reminders are everywhere. Redwood forests, the starkness of a Utah butte, the elegance of a moose and the marvel of an orchard spider's web in a garden - wonders like these stir the soul and prompt yearnings for environmental protection.

There are the dark reminders, too. A brown haze beglooms the Los Angeles horizon. A clutter of debris heaps up like mutant snow, knee-deep along the highway from La Guardia Airport to Manhattan. Oil-slicked water fouls once-pristine Gulf Coast beaches.

Aesthetic appreciation of nature is only one part of the environmental picture. Attaining a good quality of life involves not only protecting nature's gifts but also protecting against health-endangering pollutants and raising individual incomes and standards of living. More and more Americans are concerned about each of these problems. Fortunately, the solutions are not mutually exclusive. Evidence suggests that wealthier societies have generally higher living standards, lower pollution levels, longer life spans and higher quality environmental amenities.

Ideas Have Consequences. Our environmental rule-making framework is ailing. As previously noted, 30 years of environmental policy making in the United States have both achieved results and engendered conflict. The emphasis on top-down, one-size-fits-all rule making is ill suited to solving complex, often location-specific problems. Here, as elsewhere, ideas have consequences. How we think about environmental problems shapes our decisions on how to address them.

The Old Vision. Traditional environmentalism has cast business owners against environmentalists, the private sector against the public sector, "naturists"10 against scientists, regulators against the regulated and some industries against others. It has led us to target marginal problems with little regard to mitigation costs. It has fostered the crude tools of command and control that cannot take into account intricate environmental relationships. This traditional vision combines three basic assumptions about environmental goals and how to achieve them.

First, traditional environmentalism tends to set environmental values apart from other values and to treat them as sacrosanct or absolute. Under this view, the very idea of balancing environmental values with other values is suspect. For example, one traditionalist goal is to eliminate all emissions and achieve a pristine state of nature; some environmental groups have proposed total elimination of chlorine emissions.

Second, traditional environmentalism assumes that the knowledge of planners or other experts is most relevant to environmental problem solving and ignores the importance of experience and the variability of time, place and circumstance. People who adhere to this vision tend to view environmental problems as static, exhibiting simple, linear, cause-and-effect relationships. They also often view environmental problems as separable, disconnected in cause, effect and solution.11

In this view, one-size-fits-all regulations seem appropriate and desirable. And progress is often defined as a series of prescribed results achievable by mandates: reaching "ideal" population levels, using "preferred" technologies, creating planned communities and consuming only specified amounts of resources.

Third, traditional environmentalism fails to appreciate the power of incentives to change behavior. In general, adherents of this vision are suspicious of the market's ability to solve environmental problems. Clearly defined, secure and transferable property rights, the foundations of the market, also come under suspicion. Moreover, since the market is the mechanism that advances economic growth and prosperity, the old vision often has linked it to environmental degradation.12

For many people, the old vision is still compelling. They are attracted by its apparent moral purity and seemingly plausible view of man's interaction with nature. But there is a better vision - one that underscores the importance of personal accountability, flexibility, diversity and decentralization.

A New Vision. I call the alternative vision new environmentalism. It differs from the old model in three fundamental ways.

First, new environmentalism views environmental values as part of a diverse cluster of human values, the pursuit of which establishes the quality of life. The desire to protect the planet from degradation, to preserve nature's beauty and to mitigate harmful emissions are values most of us share. But because our resources are constrained, we must make choices. We must balance each value against all others as we make individual and collective decisions.13

Second, new environmentalism views the world as complicated and interconnected, involving dynamic changes and interactions. To understand the results of environmental policy, one must understand the complexity of both natural systems and the incentives that motivate human action. For this reason, the new vision recognizes that the knowledge most often relevant to understanding and solving environmental problems is specific to time, place and circumstance.14

Finally, new environmentalism views economic incentives as critical determinants of behavior. For this reason, the new vision views markets and the property rights on which they depend as tools for environmental problem solving. They are necessary means to reaching the common end of maintaining a sustainable, livable environment. Wealth creation, appropriately harnessed, is an engine of progress - including environmental progress. In this view, progress consists of increasing people's knowledge and understanding of environmental issues and the trade-offs involved in achieving desirable results. It recognizes the need for ongoing adjustment and readjustment as human needs and values evolve, as old problems wane and new ones arise.

Solving Problems. New environmentalism focuses on decision-making processes. It focuses on finding ways to obtain and use good information and on providing incentives for environmental stewardship. It focuses on ways of ensuring that individuals and organizations are able to express the environmental values they hold. New environmentalism proposes the creation of decision processes and institutions that:

improve access by individuals, firms and other organizations to environmental knowledge;

foster a balancing of environmental values with other human values; and

create conditions in which environmental innovation and creativity can flourish.

We call our approach new environmentalism because its focus is on how environmentalism fits into the whole complement of activities that affect the quality of life. This environmental vision emphasizes how environmental values are integrated with other values. It considers how environmental progress integrates with economic activities. It links scientific and economic information with pursuit of human values. It examines the relationships of human motivations with decision-making institutions. Finally, it stresses the complexity of the physical world: how different events are interrelated and how one action often creates, in a domino effect, a series of other reactions and consequences.

Theoretical Foundations of New Environmentalism. The approach advanced here is based in part on the ideas of Friedrich A. Hayek, the Nobel Prize-winning scholar best known for his work on the problems of coordinating complex information in economic decisions.15 The Hayekian approach differs from that of traditional environmentalists. The latter have focused too much on prescribing outcomes and how to achieve them and too little on how to understand the complex systems in which millions of people pursue their diverse and conflicting interests. The Hayekian approach also differs from that of the neoclassical economists who tend to focus on economic efficiency rather than on how different decision processes accommodate diverse values and how institutions affect incentives and the uses of information.

New environmentalism differs from traditional environmentalism with respect to three fundamental issues: values, knowledge and incentives. Let's look at each in turn. What are we trying to achieve through environmental policy? Articulations of environmental goals take many forms, from the metaphysical to the utilitarian. New environmentalism attempts to express environmental values within the context of other human values. How can this be done?